Join Date: Feb 2010
Location: Narragansett Bay
Thanked 284 Times in 267 Posts
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I think the credit line is a great way to go.
If this were available, remember that the interest is not going to be deductible and the rates are going to be much higher than a secured loan.
Ironically, since you personally guarantee an unsecured line, the bank has to sue you to collect, rather than foreclose or repossess collateral. When they are awarded a judgment, the collection of that judgment can be filed as a lien against your house in all states that I am familiar with. Very ironic for an unsecured loan, isn't it.
If the bank takes the collateral (boat), they can still pursue a judgment for any shortfall, but are then required to dispose of the collateral at fair value to determine the shortfall. That is hard for them to prove, since most banks prefer fast recovery to full recovery. They often ignore the shortfall as a result and just leave it open on your credit report as repossessed collateral or unpaid credit.
Just more to consider.
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